Contract analysis

I. EXECUTIVE SUMMARY This memorandum summarizes the principal legal due diligence findings of Calderwood & Harkness LLP ("C&H" or "we") in connection with the proposed asset purchase (the "Transaction") by Ardent Healthcare Acquisition Corp. (the "Purchaser"), a newly formed, wholly owned subsidiary of Ardent Capital Partners III LP ("Ardent Capital" or the "Buyer"), of substantially all of the assets of Cardinal Pea

II. SCOPE AND METHODOLOGY Data Room Review. CPI established a virtual data room (the "Data Room") hosted by Glenrock Data Systems, to which C&H was granted access on February 4, 2024. As of the date of this memorandum, the Data Room contains approximately 4,200 documents organized across twenty-three (23) folders corresponding to the principal areas of the Seller's business and operations. Our team has reviewed all d

1. Corporate and Organizational Matters

6. Healthcare Regulatory Compliance

7. Litigation and Regulatory Proceedings

10. Tax Financial and accounting due diligence has been handled separately by Ashford & Creighton LLP, and we have coordinated closely with the Ashford & Creighton team to ensure consistency between the legal and financial workstreams. Environmental due diligence (Phase I ESA scope) has been conducted by Whitmore Environmental Sciences Inc. Healthcare regulatory due diligence has been conducted jointly by C&H and Har

III. CORPORATE AND ORGANIZATIONAL MATTERS A. Seller's Corporate Structure Cardinal Peak Industries, Inc. is a corporation duly organized and existing under the laws of the State of Delaware. CPI was incorporated on March 14, 2011 (Delaware File No. 5487231; Federal Employer Identification Number 82-3947561). CPI was founded by Dr. Randall J. Whitfield, who continues to serve as Chairman of the Board of Directors and

IV. MATERIAL CONTRACTS A. Overview CPI is party to approximately one hundred eighty (180) contracts that have been identified as potentially material to the business. Our review has focused on all contracts with an annual value exceeding $250,000 and all contracts containing change of control, anti-assignment, consent-to-assignment, or other provisions that could be triggered by or otherwise relevant to the proposed

V. REAL ESTATE AND LEASES A. Overview CPI does not own any real property. All thirty-seven (37) clinic locations operate under triple-net lease arrangements with third-party landlords. CPI's facilities are commercial medical office spaces, ranging in size from approximately 3,500 square feet to approximately 12,000 square feet. The average remaining lease term across all thirty-seven (37) locations is approximately 4

VI. INTELLECTUAL PROPERTY A. PeakConnect Platform CPI's most significant intangible asset is its proprietary patient-engagement software platform, known as "PeakConnect." PeakConnect was developed in-house by CPI's technology team beginning in 2016 and has been deployed across all thirty-seven (37) clinic locations. The platform provides functionality for patient scheduling, telehealth integration, clinical outcomes

VII. EMPLOYMENT AND BENEFITS A. Workforce Overview As of the most recent employee census provided by CPI (dated March 1, 2024), CPI employs approximately 2,100 individuals across its seven-state operating footprint. The workforce is composed of approximately 1,450 licensed clinicians — including physical therapists (PTs), occupational therapists (OTs), speech-language pathologists (SLPs), and licensed behavioral heal

VIII. LITIGATION AND REGULATORY PROCEEDINGS A. Dawson v. Cardinal Peak Industries, Inc. The most significant pending litigation matter involving CPI is Dawson v. Cardinal Peak Industries, Inc., Case No. 3:23-cv-01847, currently pending in the United States District Court for the Middle District of Tennessee. This action was filed in 2023 as a putative class action alleging violations of the Fair Labor Standards Act (

1. Two (2) slip-and-fall personal injury claims at clinic locations (one in Knoxville, Tennessee, and one in Charlotte, North Carolina). Both claims are covered by CPI's general liability insurance policy (Brindoval Casualty & Indemnity Co.), and the aggregate exposure is estimated at less than $300,000. CPI's insurer is handling the defense of both claims.

2. One (1) vendor payment dispute with a medical equipment supplier, involving an alleged underpayment of approximately $85,000. The matter is in early-stage negotiation and is expected to be resolved without litigation.

3. Two (2) demand letters from former employees alleging wrongful termination (one in Georgia and one in Alabama). No lawsuits have been filed in either matter. CPI's in-house counsel has responded to both demand letters and believes that neither claim has merit. The estimated combined exposure is less than $200,000. Importantly, we have confirmed — through both document review and direct representation by CPI's mana

IX. HEALTHCARE REGULATORY COMPLIANCE A. Licensing and Permits CPI maintains state healthcare facility licenses and professional licenses in all seven (7) states in which it operates (Tennessee, Georgia, North Carolina, South Carolina, Alabama, Virginia, and Kentucky). The specific licensing requirements vary by state and by the type of services provided at each facility (outpatient rehabilitation services, behavioral